Farmers fear impacts of trade war, but hold back from blaming Trump

Sun., July 15, 2018, 4 a.m.

Cody Miller, 21, and his father, Lance Miller, 47, lean up against their 1981 Allis-Chalmers MH-2 combine that the Millers recently picked up for $1,300. The Millers fix up old combines, including three given to them for free, to keep their small wheat farm alive near Colfax. And that's before a brewing trade war that could hit Washington harder than any other state, according the U.S. Chamber of Commerce. "The grain prices are holding us all hostage," Lance Miller said. (Colin Mulvany / The Spokesman-Review)

COLFAX – Cody Miller, 21, has been riding in combines since he was 4 months old.

He knows every belt and sprocket of the 1981 Allis-Chalmers MH-2 combine that his dad recently purchased for $1,300. The odd new part added here, with an axle off one of the three “parts” combines there, and the Millers cobble together a serviceable wheat-harvesting machine.

But they have no idea how a brewing trade war prompted by President Donald Trump’s tariffs on steel and aluminum from China, Mexico, Canada and European allies will affect their family farm.

“It scares the crap out of me that we won’t be able to do this,” Lance Miller said. “The grain prices are holding us all hostage.”

China has responded, and other countries have promised similar moves, with retaliatory tariffs that are mainly aimed at U.S. exports of agricultural and food products such as soybeans, cereal, seafood, meats, fruits, nuts and dairy, as well as intermediate goods and transport equipment, including vehicles.

According to the U.S. Chamber of Commerce, the state of Washington could be hit the hardest, affecting an estimated $6.2 billion worth of exports and impacting 945,700 jobs.

“Tariffs are beginning to take a toll on American businesses, workers, farmers, and consumers as overseas markets close to American-made products and prices increase here at home,” U.S. Chamber of Commerce President Thomas Donohue said in a statement last week. “Tariffs are simply taxes that raise prices for everyone.”

Brett Blankenship, 60, farms about 10,000 acres of wheat with his brother near Washtucna, Washington. Blankenship said Trump erased years of work to build markets for Washington wheat when the president pulled out of the Trans-Pacific Partnership.

“In this trade war, no one wins,” said Blankenship, the former president of the National Association of Wheat Growers. “This is going to affect wheat, apples, cherries and Boeing. Anybody who shops at Wal-Mart will also be affected. This is not good.”

Exports in danger

Blankenship said the biggest importers of Washington wheat are the Philippines, Japan, South Korea and Indonesia.

China is still an emerging market for Washington’s soft white wheat. According to the Washington Grain Commission, the state’s white wheat exports have grown to roughly 150 million bushels a year. As of April, China had imported 12.5 million bushels for the 2017-18 marketing year – which begins June 1 for wheat – half of which came from Washington.

“These markets take years to develop, but they could be destroyed overnight,” Blankenship said. “In order to develop markets in the Pacific Rim, they respond to reliability and trust. And the current administration is neither, so we are very concerned about the long-term effect.”

But Lance Miller, and others, said they haven’t yet felt the sting in Colfax and they were not yet ready to throw Trump under the combine for at least trying to improve U.S. standing in foreign markets.

“To be honest, I don’t know,” Miller said. “I don’t think everything (Trump) has done is working. Something will come to a head sooner or later.”

The tariffs don’t appear to have undermined support for Trump thus far based on results of a recent Washington Post-Schar School poll. In the 15 states that have the highest share of jobs at risk from a trade war with China, Trump’s approval rating was 57 percent in late June and early July – higher than the support won in those states in the 2016 election, according to the Washington Post.

In a Brookings Institution analysis by senior fellow Mark Muro, the 15 states with the most to lose from a trade war include Idaho and Washington, the Post reported.

Eric Maier raises wheat on about 7,500 acres near Ritzville. The former president of the Washington Association of Wheat Growers said production problems in Russia and other countries have kept the price of wheat somewhat stable.

Soft white wheat was selling at $5.28 a bushel Friday at the Ritzville Warehouse Co.

“I think the tariff (dispute) will work itself out,” Maier said. “It does give us all some jitters. But I’m optimistic in the long run that we can come to a resolution. The problem with a trade war is that agriculture is the first one hit.”

But Maier said he supports most of Trump’s objectives.

“We have to level the playing field. I see this administration helping with a lot of the burden of environmental regulations and making things a little more common sense,” he said. “So I see a lot of positives.”

While Maier did not criticize Trump for sparking the tariff fight, he agreed with Blankenship on rejoining the Trans-Pacific Partnership.

“I’m not a trade expert, but that’s one I’m very sensitive about,” Maier said. “Japan is a huge and stable market for us. We certainly want to keep that trading partner happy to the point that they are still taking Washington wheat. I am hoping that we get back into that agreement.”

While wheat is a huge issue for farmers in Eastern Washington, an expanded trade war could also have huge ramifications for ranchers, said Dick Coon, who ranches on his family’s 11,000 acres near Benge, Washington.

“All of agriculture is nervous,” said Coon, who sits on the executive committee of the National Cattlemen’s Beef Association. “The futures market has been zipping up and down … based on people being nervous of the Chinese tariff – and they are worried about Canada, too.”

Like Miller and Maier, Coon generally supports Trump’s efforts, even if they spark a wider trade war.

“I feel like whatever it takes to get the attention of some of these other countries, even though it might impact our markets,” Coon said. “I think we have been taken advantage of for far too long.”

Family legacy

While the impacts of the trade war remain in doubt, Lance Miller, 47, will continue to put aside projects and put off vacations to work on the farm that he hopes someday to pass on to his son, Cody.

The father-son duo work as heavy machinery mechanics for Whitman County. On days off, they work on the Allis-Chalmers to keep the family dream of continuing to farm their 500 acres alive.